KNOWLEDGE BASE
How is the interest calculated on my credit card account?
This article explains how interest is calculated on your credit card account. Use your billing statement to follow each step. If you have questions, call us at 800‑285‑8585 and a banker can help. We accept relay calls.
How to calculate interest on your credit card balance
- Find the number of days in the billing period
- Look on page 1 of your statement, at the bottom of the Activity Summary section.
- Find the annual percentage rate (APR)
- The APR appears in the Interest Charge Calculation section, in the second‑to‑last column.
- You may see different APRs for:
- Promotional balances
- Purchases
- Balance transfers
- Cash advances
- Only use the APRs that apply to your account.
- Calculate the daily periodic rate
- Divide the APR by the number of days in the year (usually 365).
- Example: 23.49% ÷ 365 = 0.0643561%
- Convert that number to a decimal by dividing by 100.
- Example: 0.0643561% ÷ 100 = 0.000643561
- Divide the APR by the number of days in the year (usually 365).
- Find the balance subject to interest
- The balance subject to interest is listed in the Interest Charge Calculation section.
- It is the third column from the right.
- Each balance type may have a different amount.
- Calculate the interest for each balance
- Use this formula for each balance type: Balance subject to interest × daily periodic rate × days in billing period = interest charged
- Add all interest charges together
- Add the interest amounts for each balance type.
- This total is the interest charged for the billing period.
Example
- Billing period: 32 days
APRs
- Promotional balance: 0%
- Purchases: 23.49%
- Cash advances: 23.49%
Daily periodic rates
- Promotional: 0.0000000
- Purchases: 0.0006435
- Cash advances: 0.0006435
Balances subject to interest
- Promotional: $1,000
- Purchases: $1,500
- Cash advances: $500
Interest charges
- 32 × 0.0000000 × $1,000 = $0.00
- 32 × 0.0006435 × $1,500 = $30.88
- 32 × 0.0006435 × $500 = $10.29
Total interest charged: $41.17